I am in escrow to buy a 2 unit flat in Chicago Il. Price is about $150,000, both 3 bed rooms and the building is ~2,900 SQF. There will be renovations taking place after the close of escrow. The property is located in 60644. Is this a good up and coming location? Does anyone own anything in this area? Please let me know what you think.
Rental Property Investor · Chicago · Member since 2018 · 612 posts · 1k+ votes
6y
Jonathan, plenty of people make money as landlords in Austin but it is rough.
Chicago has some very tough areas yet Austin has more murders than all of them - Chicago Homicide 2019
To be fair it's also one of the largest geographical areas and the north side of it is different than the southside of Austin. However, the point is this is not your up and coming neighborhood no matter what your realtor told you.
People make money with rentals in Austin, but it sounds like you've never been there nor fully understand what you are getting into.
I'm not trying to discourage you, just throwing some reality to the situation for you to consider.
Rental Property Investor · Chicago · Member since 2018 · 612 posts · 1k+ votes
6y
Jonathan, plenty of people make money as landlords in Austin but it is rough.
Chicago has some very tough areas yet Austin has more murders than all of them - Chicago Homicide 2019
To be fair it's also one of the largest geographical areas and the north side of it is different than the southside of Austin. However, the point is this is not your up and coming neighborhood no matter what your realtor told you.
People make money with rentals in Austin, but it sounds like you've never been there nor fully understand what you are getting into.
I'm not trying to discourage you, just throwing some reality to the situation for you to consider.
Lender · Chicago, IL · Member since 2016 · 653 posts · 313 votes
6y
@Jonathan Forouzan to add to the other commenters, is this your first deal? Do you have any experience in these type of areas, whether it be indirect or direct? Do you have strict property management protocol in place? Do you know what good property management looks like? Bullet proof leases?
These areas cashflow on paper, but not in reality (unless you are well versed with dealing with these tenants), do NOT rely on a PM company to your job and run your business. I repeat, NEVER rely on a PM company to do your job and your business.
I highly suggest you reflect on these question and triple think about the action you plan on taking. Most investors se the cashflow on paper and get all flustered in the cheeks. However, once you do about 3 evictions in 5 months or people don't want to rent your unit because a violent crime just took place a week ago (the entire neighborhood knows, but YOU don't cause you don't live there) or when the tenant obliterates the unit and you have to spend $10,000 on turnover, the returns are a joke and not worth the time. Give it some real thought and talk real property owners in the area.
I appreciate this a lot from all of you. My concern was the crime and the Covid - 19 issue at hand. I think prices are going to go down so I backed out of the deal. I have a lot of experienced with multi family in Los Angeles and have multiple buildings in the area. I just have had a hard time with the pricing out here. Its just WAY to high. I hope it will turn soon. My full time job is a Commercial Insurance Broker so this is a investment for me. But for the time being I am going to sit back and see what happens to the economy.
I wanted to make sure I replied to all comments:
- is this your first deal? In Chicago Yes. Do you have any experience in these type of areas, whether it be indirect or direct? Yes in Los Angeles Do you have strict property management protocol in place? Yes i found a great one in Chicago. Do you know what good property management looks like? Yes, I have had the best and the worst PM'S. The most important part of a PM for me is a hands on person. Not a chop house. Bullet proof leases? Yes
At this point I have just had phone conversations with them. But i cannot refer them to you without actually know how well of job they do. I would only want the best for you.
On another note do you have any zip codes i can search into to see if there are any deals?